Basic idea is simply wrong, says European Investment Bank chief Hoyer

European Investment Bank (EIB) President Werner Hoyer cautioned India against slapping import and safeguard duties on solar components, saying the country’s best interests still remained in multilateralism and free trade.

“There might be a situation for these kinds of retaliations (import duties) and it could be very tempting to try, but I think the basic idea is simply wrong,” Mr. Hoyer said in an interview.

‘Lose-lose situations’

“What we have learnt from the great economists 200 years ago still holds true — this leads us into lose-lose situations.

“If we are to go for win-win situations then we should open up markets, make sure we are fair in these relationships.” “Everything that looks like tit for tat or protectionism undermines multilateralism, undermines cooperation and at the end of the day, it might even undermine the development of peaceful cooperation which we have seen after the second world war,” he added.

In January this year, the Directorate General of Safeguards had recommended the implementation of a 70% safeguard duty on solar cells imported from China and Malaysia for a period of 200 days. The government had not taken a decision on this yet, but the issue had come under considerable debate in the domestic solar sector.

“Over the last 10 years, Europe has lost ground in terms of R&D and innovation by at least 1% of GDP per year in comparison to East Asia, South East Asia and North America,” he said.

“There is also a gap between East Asia and South Asia, and therefore one piece of advice to India would be to open up to the world. Don’t believe that because your exports are relatively low, the entire issue of free trade and multilateralism is less important for you.

“It is important for your producers and your consumers,” he added. “And, at the same time, don’t overlook the need to do much, much more in science, technology and innovation and education,” he added.